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Unilateral and Multilateral Gains from Trade in International Oligopoly

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  • KENJI FUJIWARA

Abstract

Constructing a two‐agent model of international duopoly with increasing returns, the present paper examines potential gains from free trade. It is shown that under certain conditions, both agents in a country become worse off in free trade than in autarky with no redistribution. Further, the lump‐sum compensation can never achieve a Pareto‐improvement in such an economy. However, we can find a non‐lump‐sum redistributive scheme that makes nobody in the country worse off in free trade than in autarky.

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  • Kenji Fujiwara, 2005. "Unilateral and Multilateral Gains from Trade in International Oligopoly," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 404-413, December.
    • Handle: RePEc:bla:ecorec:v:81:y:2005:i:255:p:404-413
    DOI: 10.1111/j.1475-4932.2005.00278.x
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    3. Toru Kikuchi & Kazumichi Iwasa, 2009. "Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged," Discussion Papers 0913, Graduate School of Economics, Kobe University.
    4. Kenji Fujiwara & Tsuyoshi Shinozaki & Akihiko Yanase, 2011. "Dynamic Interactions in Trade Policy in a Differential Game Model of Tariff Protection," Review of Development Economics, Wiley Blackwell, vol. 15(4), pages 689-698, November.
    5. Murray C. Kemp, 2010. "The Gains from Trade in a Cournot–Nash Trading Equilibrium," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 832-834, November.
    6. Kenji Fujiwara & Tsuyoshi Shinozaki, 2010. "The Closed‐Loop Effects Of Market Integration In A Dynamic Duopoly," Australian Economic Papers, Wiley Blackwell, vol. 49(1), pages 1-12, March.
    7. Kenji Fujiwara, 2006. "Why Resisting Globalization Can Be Reasonable," Economics Bulletin, AccessEcon, vol. 6(5), pages 1-8.

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